tv [untitled] February 24, 2012 4:30am-5:00am PST
until the documentation is available. >> we always get hit by that in the budget process. for these numbers. >> agreed. i am working with the city comptroller to do a deeper analysis on work orders. the numbers that drive the work order amounts, to make sure that we are getting good value, that we can explain, defend, or modify if needed each line of the work orders. >> go ahead. >> the next slide, number seven, provides detailed over something i have talked about. over what we have been able to do so far, it is identify net reduction as $32 million
respectively in the next fiscal year. our challenge will be working forward and much simpler. as i mentioned, the reduction of management facts will be difficult, but necessary. i mentioned some of the other costs and payments, of which really justret re-baselined the fiscal year 2013 baselines, which we are using it as a guide. we are looking at ways to get out of leased space and consolidate the existing building space. you can see that there are other details here underneath of the lines. happy to quickly redirect them. >> so, i guess i would say that the good news is in terms of closing the base line gap, we
have been able to identify a number of areas with potential expenditure reduction that we would be poised to bring to you. as i mentioned, in the november workshop, closing the base line with the balances the budget under the current service model whereby, for example in muni, you are not adequately funding maintenance. the cleaning of the cars, the training and supervision of the operators would enable us to close the gap and continue what i think is the inadequacy of the level at which we are funding all of the supports that should be making that frontline service run well, dealing with budget gaps and training issues. we are about the breakdown for the vehicles, funding for the vehicles. but i have mentioned in november is what i did not want to do, a budget that keeps us limping
along in the same way, limiting -- kicking down the road the decisions to fully address what we need to in order to make the system worked well. that issue impacts muni. it is the same in terms of parking and traffic operations, where despite the opportunities to reduce expenditures in the baseline, we are fundamentally resources in the operations and, in my estimation although we have been able to find all of the potential expenditure reductions, which slide #eight shows, our additions that i will likely be proposing in the budget, all of which we have not found funding for -- basically, what this will be doing is, in my mind, right sizing. these are mostly have your numbers for fiscal year 2012, --
these are mostly half of the year numbers for fiscal 2012, 2013. the basis of this is in muni support services. rail maintenance, bus maintenance. the tracks, the signals, the electronics. all of these through the mr. haley staff analysis are provided close to the levels that we would need to properly maintain and run the system. this is not all of what did it -- the division directors would say is needed. this is what would say is a reasonable first caught. the reason that the numbers are lower in the first place is that they are largely included with half years staffing. >> the issue raised is an
interesting one. that the baseline seems to be providing more service over the past year. is the baseline based on all of those things that we did last year? does that become the new baseline? >> we have been funding those service improvements basically threw open runs. but we have, we are missing areas of service throughout the system. we are capturing those savings and putting them in the areas that you have mentioned. m, x, 28, where the capacity and demands were not able to carry otherwise. " we are not contemplating in this budget is a change in the
service level. this is really fully restores in the service level that we have today. it does not presume significantly increased writer shipped from increased use writer ship. it is really the baseline level of service that is properly resource. >> i assume that this is long term, correct? >> we will get to that in the next couple of slides. >> well, quickly. >> what we have tried to present to this task force is a basic understanding of the baseline challenge and are structural challenge. we have been keeping them up-to- date on the expenditure side end they have been focused on the revenue side in terms of things
that we might want to include in the budget that we bring forward to you in the coming fiscal year. and, or, things that might be on the ballot in subsequent years. it is not all extremely long term. you will see it in the next slide. if you want to add this level of support service into the system, we will need some other revenues solutions. i have been able to close the base line gap, in theory, but not with enough room to support these new programs. going to the next slide, the net of where we end up is a 20 million gap next year, with a 33 million gap in the following year. absent additional expenditures solutions, which i do not expect to be able to find it at those orders of magnitude, we would
need revenue solutions in order to close some of those gaps. the numbers on the previous slide, while not falling but the bird -- division directors say is what they really need, it is nonetheless an ambitious task, putting us kind of back into the red in the expenditure cuts. this is where it leads us. the remaining slides are just kind of reminders of what we have previously reviewed in november. these were not things that we are necessarily recommending. i have asked for your authorization to convene this budget balancing panel. we started that work in the beginning of january. their final meeting, their next meeting is when they are
supposed to develop short-term solutions, of which would be ready, if not for the meeting later that day, our next board meeting, our april budget discussion. and then they are going to meet for another three sessions, four sessions, to develop longer-term solutions. we should get, for you, in the next month or so, a more refined list from this laundry list based on what this panel is suggesting. >> are these from the panel? >> no, with the exception of passes, these are just issues that have been brought up in the past and brought to you again. just to kind of remind you that this is not the first time that we have all been thinking about what the potential revenue sources could be. we do ask that you address some of the requests of the public
speakers. because there are impacts to the huge their policy decision, it is taking into account the larger context. it is my recommendation that we do include the decision about the youth passed their into the budget process. -- youth pass fare into the budget process. it is only a difference of one or two meetings, in terms of timeline. and we would all like to get this resolved sooner rather than later. i guess it does a disservice to consider it outside of the budget process. we included it here to get a picture of the budget impacts. these are just ideas that could
be included in the budget. lax completely balanced. do you still come up with a 19.6 and 30.6? will one of the considerations be a service reduction? >> that would be an honest option for the board to put on the table to the sitter. additional revenues, additional expenditure cuts outside of cutting service. i think we have found tens of millions of those already. it would be to continue doing what we have been doing, maintaining the frontline service without fully funding the maintenance, car cleaning up, and supervision. or, we write sized the service for the levels of stabbing a we have.
>> when we cut the service by 10% two years ago, how much money was involved? >> $30 million. >> 61%? >> that gives us the range. i think it is the best option to have, without people understanding this, as opposed to what. i realize that i thought that that was a more honest way of doing it. >> certainly, i do not want to be the one to start in a new job in immediately recommend that the board cut services. but i do want to bring forward an honest budget. if the resources that we have available are not responsible
things to bring forward, options accordingly. >> you mentioned these things in your letter, about the issues in the other things. other virtue options that are left. >> can i just clarify the numbers we're seeing on page nine? the $19 million gap, the $33 million gap, they do not include the possible new revenue sources. >> that is correct. all that they assume is the indexing that is shown on slide 12. >> all the things that you noted have been brought to the board before, but are now in front of us again. they exist in order to close the gap? >> based on the march 6 public
hearing in town hall meetings that i will make reference to later, based on input from this panel that i have convened, we will put that all together. we have proposed a series of things that would provide for a balanced budgets at this level of funding. >> in congress, the house proposal is a devastating one. that would not have an impact on the coming year, would it? >> not so much an impact on the operating budget. this is the capital budget we will be getting to in a minute. >> also, the numbers on page 9, that we can impact with the additional revenue sources on page 10 and page 11, they still do not really get to the numbers
on page 8, the new program. >> are the numbers included in slide 9? >> they are. >> thank you. >> to be clear, slide 9 basically captures what we have already been able to identify as potential expenditure reductions, adding in the raid advisory on the expenditure side. this is a worst-case gap, if we were to fund everything that we wanted on page 8. which is not as much as we would like to, but it is a reasonable and significant step. 10 and 11 have some of the old ideas. one thing that i should point out that we have added arm slide 11, the last line, eliminating
the free employees transit passes, except for those for whom we have a contractual obligation to provide them. it is not a lot of money and, obviously, a very unpopular proposal to put forth. as we listen to public comment about the difficulty of affording transit, it is difficult for me to defend why people who are gainfully employed, with good jobs, should not be paying their fair share. >> the total democrats have of a million dollars. >> this is employees and family? >> everybody. >> this would only apply to the employees for whom we are not contractually obligated to provide passes. that is the biggest chunk right
now. but it is also an estimate of how many used revenues they would get when they switch from a free pass . >> do you know how many people take advantage of this, roughly? >> our estimate is that those employees that do not have this bargaining agreement, 25% of purchase passes. >> how many are actually using it now? >> everyone gets a free pass. >> the users? >> everyone uses that. the use it daily. >> thank you. ok. >> #12 just shows the indexing that is largely seen before. you can see that there will be transit fare increases, according to the board indexing policy.
not a single fares, but the way the policy rounding works. the regular adult fast passage of go from 62 to 64, then 66. the discounted one, a unit and senior, would go from 21 to 23. this is the indexing policy. slide 13 shows some of those potential revenue solutions and, therefore, would be available to us at the earliest if they were on the ballot and approved in november for the second half of the first fiscal year. it would be difficult to budget for at, as we have no idea if we will get approved. this is a sample of what the panel is currently considering for the long term.
finally, the operating budget, as i mentioned, it will be coming at the next meeting for the first public hearing and budget presentation. we will use the next meeting for that opportunity. we do have a number of town hall meetings currently set up. we will put it on our website, if it -- if it is not there already. i believe that i mentioned it in my last report, we want to try to take an opportunity to solicit fraud to educate on the state of the budget and get some feedback on the budget. in addition to this panel that
we get from public comment at these hearings, in this room, we have will have a nap -- we will have an opportunity to hear more from the people of san francisco. of course, all meeting locations will be accessible and served by muni. the board is -- we will make sure they have all the time my information. so, then we will be coming to you in april to approve the budget. or if you need more time in the middle of april. getting to city hall on may 1. i wanted to pause for any additional questions on the operating budget. >> members of the board? >> thank you very much.
>> very comprehensive. let a lot of good staff work on all of this. moving quickly on to the capital budget. is this one of those things where we have to have public comment? >> quickly, to give you an overview of the capital budget, you had already approved the 20-year capital plan, unconstrained. where we are for the next step forward is the five-year capital improvement program, constrained, meaning that we have to balance the programs that we put forthwith the revenues available. from that five-year picture, we get to our two year budget, which will come to you along with the operating budget in april. in terms of sources, this is where you will see the potential impact from the activity happening right now in
washington, d.c., on us. we are fairly heavily reliant on federal formula funds, for example, for much of our transit capital improvements. if that were to significantly change, some of those proposals seem to be leaning towards the back, moving forward to maintain what we have. you will see that there are a number of other local state and funding sources for the proposed city obligation bond. passed by the voters this past november, legislating a small portion of which, coming to the mta, the mta has not generally been a significant center -- player in the geobond table.
the mta has been seen as independent in its need to generate its own capital improvement money. this idea actually came from the budget balancing panel. that we should consider the voters at large as a possible avenue for capital revenue for program where we have a clear investment that we can articulate in terms of service improvement. we have built in an assumption of this and have not yet begun to take it through the city process to get it into the capital plan. it is an idea that is worth pursuing. we are putting it into the five- year plan. the other thing that you will see on the slide are the revenue bonds that you had previously approved. so that those lines make for new revenue items.
new revenue items for our capital plan. moving to the next slide, we were kind of walking you through a bill but a change. from projections that we previously showed you on a five- year side, showing kind of what it works out to on the to your side, -- two years side. things seem to get dwarfed by the central subway, but when you take it out, jumping to the next slide began point out the differences from what we had shared you previously. because of the way the regional formula funding works, we have quite a bit less dollars coming in.
more than we had previously anticipated. we had been working at restructuring our plan and procurement so that we could celebrate purchases. all to me, we will not be constrained by the amount of federal money flowing through the region. the other changes, the traffic signal line that has gone up in part because of the bond from last year, the other big changes are the inclusion of the $150 million proposed bond that we should be ready to implement upon the completion of the eir. it was the summer of 2013.
so, those are the major changes. moving forward, we have developed capital investment in debts. -- index. this is reflected in the unrestrained plan, showing the allocation of resources across the programs to bring ourselves fully into a state of good repair. so, the 20-year plan, because of the unconstrained numbers, they show what the allocation could be. but we have done now is overlay the five-year picture, so that you can see proportionally who the winners and losers are as we start to put the constraints of the reality of revenue on to the program. that is shown in slide 7. what you will see on the far right column, those items that
have a negative are in parentheses and in red. the ones that have a lower percentage of the portfolio based on the revenue available, more than what we think we actually need, based on the 20- year plan, it is based on the revenues available. they will do a little bit better as a percentage of total available and based on what the total needs are. it is important to note that we may end up with a higher percentage of the revenue coming in and what it needs as a result of the overall portfolio. as opposed to 21% of the overall capital need. we still will not have the revenues that we need in that one line item. this just shows the impact of
putting our constraints and how it changes the distribution of the revenues that we would have to address, agency-wide, capital needs. you will see that the bottom- line revenues are significantly last them of what our plan says that we need and what is happening in washington that can completely exacerbate those proposals to move forward. so, because we have greater needs and revenues to support them, slide in priorities. if that i believe were previously approved by the board. these are basically the filters to ultimately come up with a five-year and two-year capital plan is that we will be bringing to you for approval, so we are taking each one of the projects that are submitted, and each one of the program line items,
running them through the filter, and through that process, we will prioritize to get down to a two-year budget and a five-year- budget that is balanced, so slide 9 then shows the shortfall that we have to close in terms of the needs relative to the revenues. we have gone through one level of prioritization to get the $2.7 billion need down to just a little over $2 billion, but because we only have $1.98 billion in revenues, we still have some gap to close, off -- so we will continue to put projects on that screen that we can bring to you in april a balanced budget. we are also looking at exig